The Department of Labor recently released its 2014 Semiannual Regulatory Agenda, a non-binding statement regarding upcoming rulemaking.  The Agenda provides a timetable for issuance of a proposed rule revising the regulations interpreting the Fair Labor Standards Act’s “white collar” overtime exemptions, in conformity with the President’s recent directive.  As we often discuss, certain “white collar” jobs are among those most commonly exempted from overtime under the FLSA, such as those employed in an executive, professional or administrative capacity.  Under the current federal exemptions, employees earning $455 or more per week on a salary basis are not eligible for overtime pay if they also perform exempt duties under one of these three tests.

In a March Presidential Memorandum, President Obama announced his directive to revamp the exemptions, which have not been revised since 2004.  President Obama stated his administration’s view that the exemptions’ $455 salary threshold means that “millions of Americans aren’t getting the extra pay they deserve” because “an exception that was originally meant for high-paid, white-collar employees now covers workers earning as little as $23,660 a year.”  In addition to questioning this current salary basis level, the President also urged simplicity in the proposed rules, likely a reaction to a recent study concluding that the current regulatory scheme is a breeding ground for wasteful litigation over FLSA issues.

Employers should continue to monitor this expected change in the FLSA landscape.  If these yet-to-be-proposed changes become final, as with the last revisions in 2004 employers may need to implement changes to classifications.  Note that that this new rulemaking only addresses federal law; many states’ already impose a higher salary requirement and differing duties requirements for exemption.